Indian Drugmakers Targeting Mexico, Brazil Expansion

Indian generic drugmakers Wockhardt, Strides Arcolab and Unichem have all recently announced significant expansions to their businesses in Latin America.

Wockhardt, which makes drugs including anti-infectives and diabetes treatments, has established a majority joint venture in Mexico and a wholly owned marketing subsidiary in Brazil. The company has also set up a generics joint venture in South Africa. The Mexican venture will be 49% held by local drug company Rimsa, which also last month announced a marketing deal with a US firm, KV Pharmaceutical. Wockhardt's new Mexican partner will initially market the Indian company's insulin product line. Meanwhile, the new Brazilian subsidiary will market generics, for which the company claims local demand is growing at 30% per year, as well as diabetes products.

Medium-sized drugmaker Strides Arcolab has also announced that it has acquired majority control of its Latin American holding company, Strides Latina. The company, which produces anti-infectives, already has manufacturing operations in Mexico and Brazil. In Mexico, Strides has a 74% stake in Solara SA de CV, while the company operates Cellofarma in Brazil as a wholly owned subsidiary. Strides Arcolab estimates its Latin American revenue in the 12 months to September 2004 at US$45mn.

Meanwhile, fellow Indian drugmaker Unichem has announced that its manufacturing facilities in Goa and Baddi, India, have received GMP certification from Brazil's drug regulator, Anvisa. The company will now seek to import its generics through Brazilian subsidiary Unichem Farmaceutica.

Indian generics producers are increasingly penetrating the Latin American market, where annual drug sales are some US$22bn per year and significant unmet demand for cheaper drugs clearly exists. Further, the region has a diverse disease profile, with demand ranging from basic treatments such as anti-infectives to more sophisticated, Western-style medicines. Despite favourable government attitudes, locally based drugmakers are expected to struggle to compete with Indian generic imports.